Financial Planning for Your Retirement

Retirement is one of the most important events in your life. You’ve worked and prepared for the day you can enjoy life without needing to worry about a job. However, many people are realizing they didn’t save enough and have to continue working into their later years.

Planning for retirement is critical and needs to be addressed sooner rather than later. How you plan is individualized, but there are some basic steps that can be taken to proactively realize your retirement goal.

First, you must identify your end goal. This should be the financial number you need to live, along with how long you need it to last. Identifying this number is up to you because it will vary greatly between people. If you want to travel the world, you may need a greater amount than someone who wants to stay at home and enjoy local entertainment.

Ways you can calculate this number are first, identify what you need to live. The number should include food, shelter, health costs, clothing, etc. From there, you can plan for what activities you would like to do in retirement and factor those costs in. Then you will calculate how long you expect to live and you can then find a rough number to go by. Always over save because as we advance, humans are living longer than ever before.

Risk Management
Secondly, you need to be aware of how much risk you can handle. For example, if someone is 25 years of age, they have time and can stomach swings in the market. However, for someone who is in their late 50’s, they need to be risk adverse and begin preparing their portfolio for withdraws.

Similar to retirement goals, this has basic structure but is unique to each individual. A financial planner can help you with this, but ideally you want to be in risky and higher yielding investments early and in low risk products such as bonds later.

Retirement Vehicles
Lastly, you want to consider what your vehicle will be to save for retirement. Typically, many have a 401K, IRA, or both. A 401K is offered through an employer using pre-taxed dollars while an IRA shelters you from paying tax on your capital gains. There is also the traditional brokerage account that is fairly straightforward but does not offer tax benefits.

Determining what works best for you is something you must decide. A 401K is the route most people take because you can use pre-tax dollars and some companies match up to a certain percent. When you meet with your financial advisor, also ask about Roth accounts, as these use post tax dollars so you can limit your tax payments later down the road. Also, it provides benefits for your beneficiaries when the time comes.


Financial planning is important and something you need to start soon. Too many people are relying on social security and that may not be enough. Saving steadily now will allow you to enjoy your golden years without stressing where your income will come from.